Second Quarter Revenue of $634.5 Million, up 1.9% year-over-year; on a constant currency basis, up 1.8% year-over-year
GAAP Operating Margin of 20.0% and Non-GAAP Operating Margin of 35.9%
Net Cash Provided by Operating Activities of $230.6 Million and Free Cash Flow of $224.7 Million
SAN FRANCISCO–(BUSINESS WIRE)–Dropbox, Inc. (NASDAQ: DBX), today announced financial results for its second quarter ended June 30, 2024.
“In Q2, we improved the functionality and experience of our core FSS product, and made it easier for our customers to discover, try, and buy everything we have to offer,” said Dropbox Co-Founder and Chief Executive Officer Drew Houston. “As we navigate the natural pressures of a maturing FSS business, we’re focused on solving our customers’ biggest new pain points in securing, organizing and sharing their content, and are investing in our future bets for AI-powered universal search with Dropbox Dash. As this work continues, we remain committed to operating efficiently and driving improved shareholder returns.”
Second Quarter Fiscal 2024 Results
- Total revenue was $634.5 million, an increase of 1.9% from the same period last year. On a constant currency basis, year-over-year growth would have been 1.8%.(1)
- Total ARR was $2.573 billion, an increase of 2.9% from the same period last year. On a constant currency basis, year-over-year growth would have been 2.2%.(2) Total ARR increased $17.3 million quarter-over-quarter.
- Paying users was 18.22 million, as compared to 18.04 million for the same period last year. Average revenue per paying user was $139.93, as compared to $138.94 for the same period last year. Paying users increased 63,000 quarter-over-quarter.
- GAAP gross margin was 83.1%, as compared to 80.7% for the same period last year. Non-GAAP gross margin was 84.5%, as compared to 82.7% for the same period last year. Effective January 1, 2024, the Company increased the useful lives of certain infrastructure assets from four to five years due to recent technological advancements. In the second quarter of 2024, the change in useful life reduced depreciation expense in the amount of $9.0 million for assets that existed as of the effective date of the change and applying the revised estimated useful lives prospectively.
- GAAP operating margin was 20.0%, as compared to 9.1% for the same period last year which included $37.5 million in expenses incurred in the second quarter of 2023 related to the Company’s reduction in workforce, including severance, benefits and other related items. Non-GAAP operating margin was 35.9%, as compared to 34.2% for the same period last year.
- GAAP net income was $110.5 million, as compared to $43.2 million for the same period last year which included expenses related to the reduction in workforce in the second quarter of 2023. Non-GAAP net income was $194.1 million, as compared to $174.0 million for the same period last year.
- Net cash provided by operating activities was $230.6 million, as compared to $187.6 million for the same period last year. Free cash flow was $224.7 million, as compared to $184.6 million for the same period last year. In the second quarter of 2024, the Company paid $14.9 million for the second tranche of the partial termination of the Company’s lease in San Francisco. In the second quarter of 2023, the Company had $34.0 million of expenditures relating to the reduction in workforce.
- GAAP diluted net income per share attributable to common stockholders was $0.34, as compared to $0.13 in the same period last year. Non-GAAP diluted net income per share attributable to common stockholders was $0.60, as compared to $0.51 in the same period last year.(3)
- Cash, cash equivalents and short-term investments ended at $1.063 billion.
|
(1) |
We calculate constant currency revenue growth rates by applying the prior period weighted average exchange rates to current period results. |
|
|
(2) |
We calculate total annual recurring revenue (“Total ARR”) as the number of users who have active paid licenses for access to our platform as of the end of the period, multiplied by their annualized subscription price to our platform. We adjust our exchange rates used to calculate Total ARR on an annual basis, at the beginning of each fiscal year. We calculate constant currency Total ARR growth rates by applying the current period exchange rate to prior period results. |
|
|
(3) |
GAAP and Non-GAAP diluted net income per share attributable to common stockholders is calculated based upon 323.7 million and 343.8 million diluted weighted-average shares of common stock for the three months ended June 30, 2024 and 2023, respectively. |
Financial Outlook
Dropbox will provide forward-looking guidance in connection with this quarterly earnings announcement on its conference call, webcast, and on its investor relations website at http://investors.dropbox.com.
Conference Call Information
Dropbox plans to host a conference call today to review its second quarter financial results and to discuss its financial outlook. This call is scheduled to begin at 2:00 p.m. PT / 5:00 p.m. ET and can be accessed by using the web link at http://investors.dropbox.com.
About Dropbox
Dropbox is the one place to keep life organized and keep work moving. With more than 700 million registered users across approximately 180 countries, we’re on a mission to design a more enlightened way of working. Dropbox is headquartered in San Francisco, CA, and has employees around the world. For more information on our mission and products, visit http://dropbox.com.
Use of Non-GAAP Financial Measures
Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled “About Non-GAAP Financial Measures.”
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, among other things, our expectations regarding distributed work and artificial intelligence and machine learning trends, related market opportunities and our ability to capitalize on those opportunities, as well as our ability to improve shareholder returns. Words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “plans,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this press release and are subject to risks, uncertainties, and assumptions including, but not limited to: (i) our ability to retain and upgrade paying users, and increase our recurring revenue; (ii) our ability to attract new users or convert registered users to paying users; (iii) our expectations regarding general economic, political, and market trends and their respective impacts on our business; (iv) impacts to our financial results and business operations as a result of pricing and packaging changes to our subscription plans; (v) our future financial performance, including trends in revenue, costs of revenue, gross profit or gross margin, operating expenses, paying users, and free cash flow; (vi) our ability to achieve or maintain profitability; (vii) our liability or other potential legal, regulatory, or reputational consequences of any unauthorized access to our data or our users’ content, including through privacy and data security breaches; (viii) significant disruption of service on our platform or loss of content; (ix) any decline in demand for our platform or for content collaboration solutions in general; (x) changes in the interoperability of our platform across devices, operating systems, and third-party applications that we do not control; (xi) competition in our markets; (xii) our ability to respond to rapid technological changes, extend our platform, develop new features or products, or gain market acceptance for such new features or products; (xiii) our ability to improve quality and ease of adoption of our new and enhanced product experiences, features, and capabilities; (xiv) our ability to manage our growth or plan for future growth; (xv) our various acquisitions of businesses and the potential of such acquisitions to require significant management attention, disrupt our business, or dilute stockholder value; (xvi) our ability to attract, retain, integrate, and manage key and other highly qualified personnel, including as a result of our transition to a Virtual First model with an increasingly distributed workforce; (xvii) our capital allocation plans with respect to our stock repurchase program and other investments; and (xviii) the dual class structure of our common stock and its effect of concentrating voting control with certain stockholders who held our capital stock prior to the completion of our initial public offering. Further information on risks that could affect Dropbox’s results is included in our filings with the Securities and Exchange Commission (“SEC”), including our Form 10-Q for the quarter ended March 31, 2024. Additional information will be made available in our quarterly report on Form 10-Q for the quarter ended June 30, 2024 and other reports that we may file with the SEC from time to time, which could cause actual results to vary from expectations. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Dropbox assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release, except as required by applicable law.
|
Dropbox, Inc. |
||||||||||||||||
|
Condensed Consolidated Statements of Operations |
||||||||||||||||
|
(In millions, except per share data) |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
Revenue |
$ |
634.5 |
|
|
$ |
622.5 |
|
|
$ |
1,265.8 |
|
|
$ |
1,233.6 |
|
|
|
Cost of revenue(1)(2) |
|
107.0 |
|
|
|
120.1 |
|
|
|
212.8 |
|
|
|
236.9 |
|
|
|
Gross profit |
|
527.5 |
|
|
|
502.4 |
|
|
|
1,053.0 |
|
|
|
996.7 |
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|||||||||
|
Research and development(1)(2) |
|
227.1 |
|
|
|
262.8 |
|
|
|
446.2 |
|
|
|
498.0 |
|
|
|
Sales and marketing(1)(2) |
|
112.5 |
|
|
|
120.9 |
|
|
|
221.3 |
|
|
|
240.1 |
|
|
|
General and administrative(1)(2) |
|
60.9 |
|
|
|
60.0 |
|
|
|
115.0 |
|
|
|
115.8 |
|
|
|
Net loss on real estate assets(3) |
|
— |
|
|
|
2.2 |
|
|
|
— |
|
|
|
2.2 |
|
|
|
Total operating expenses |
|
400.5 |
|
|
|
445.9 |
|
|
|
782.5 |
|
|
|
856.1 |
|
|
|
Income from operations |
|
127.0 |
|
|
|
56.5 |
|
|
|
270.5 |
|
|
|
140.6 |
|
|
|
Interest income, net |
|
4.7 |
|
|
|
3.7 |
|
|
|
12.0 |
|
|
|
7.6 |
|
|
|
Other income (expense), net |
|
1.9 |
|
|
|
(1.2 |
) |
|
|
2.2 |
|
|
|
(1.6 |
) |
|
|
Income before income taxes |
|
133.6 |
|
|
|
59.0 |
|
|
|
284.7 |
|
|
|
146.6 |
|
|
|
Provision for income taxes |
|
(23.1 |
) |
|
|
(15.8 |
) |
|
|
(41.9 |
) |
|
|
(34.4 |
) |
|
|
Net income |
$ |
110.5 |
|
|
$ |
43.2 |
|
|
$ |
242.8 |
|
|
$ |
112.2 |
|
|
|
Basic net income per share |
$ |
0.34 |
|
|
$ |
0.13 |
|
|
$ |
0.74 |
|
|
$ |
0.33 |
|
|
|
Diluted net income per share |
$ |
0.34 |
|
|
$ |
0.13 |
|
|
$ |
0.73 |
|
|
$ |
0.32 |
|
|
|
Weighted-average shares used in computing net income per share attributable to common stockholders, basic |
|
322.4 |
|
|
|
341.4 |
|
|
|
328.6 |
|
|
|
344.2 |
|
|
|
Weighted-average shares used in computing net income per share attributable to common stockholders, diluted |
|
323.7 |
|
|
|
343.8 |
|
|
|
332.4 |
|
|
|
346.8 |
|
|
|
(1) Includes stock-based compensation expense as follows (in millions): |
||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||
|
Cost of revenue |
$ |
6.0 |
|
$ |
6.4 |
|
$ |
11.2 |
|
$ |
11.8 |
|||
|
Research and development(4) |
|
64.2 |
|
|
67.4 |
|
|
119.6 |
|
|
120.3 |
|||
|
Sales and marketing |
|
6.2 |
|
|
6.3 |
|
|
11.3 |
|
|
11.8 |
|||
|
General and administrative |
|
14.1 |
|
|
15.2 |
|
|
26.4 |
|
|
27.4 |
|||
|
Total stock-based compensation |
$ |
90.5 |
|
$ |
95.3 |
|
$ |
168.5 |
|
$ |
171.3 |
|||
|
(2) |
Includes expenses related to our reduction in workforce such as severance, benefits and other related items during the three and six months ended June 30, 2023. |
|
|
(3) |
Includes impairment charges related to real estate assets as a result of our Virtual First work model. |
|
|
(4) |
On March 15, 2023, the former President resigned, resulting in the reversal of $6.7 million in stock-based compensation expense. Of the total amount reversed, $4.4 million related to expense recognized prior to January 1, 2023. |
|
Dropbox, Inc. |
||||||||
|
Condensed Consolidated Balance Sheets |
||||||||
|
(In millions) |
||||||||
|
(Unaudited) |
||||||||
|
|
|
|
||||||
|
|
|
As of |
||||||
|
|
|
June 30, 2024 |
|
December 31, 2023 |
||||
|
Assets |
|
|
|
|||||
|
Current assets: |
|
|
|
|||||
|
Cash and cash equivalents |
$ |
515.1 |
|
|
$ |
614.9 |
|
|
|
Short-term investments |
|
547.4 |
|
|
|
741.1 |
|
|
|
Trade and other receivables, net |
|
67.1 |
|
|
|
68.7 |
|
|
|
Prepaid expenses and other current assets |
|
101.8 |
|
|
|
91.9 |
|
|
|
Total current assets |
|
1,231.4 |
|
|
|
1,516.6 |
|
|
|
Property and equipment, net |
|
323.7 |
|
|
|
309.2 |
|
|
|
Operating lease right-of-use asset |
|
176.9 |
|
|
|
183.8 |
|
|
|
Intangible assets, net |
|
56.4 |
|
|
|
58.1 |
|
|
|
Goodwill |
|
411.9 |
|
|
|
402.2 |
|
|
|
Deferred tax assets |
|
461.5 |
|
|
|
460.4 |
|
|
|
Other assets |
|
56.7 |
|
|
|
53.2 |
|
|
|
Total assets |
$ |
2,718.5 |
|
|
$ |
2,983.5 |
|
|
|
Liabilities and stockholders’ deficit |
|
|
|
|||||
|
Current liabilities: |
|
|
|
|||||
|
Accounts payable |
$ |
37.8 |
|
|
$ |
38.5 |
|
|
|
Accrued and other current liabilities |
|
151.6 |
|
|
|
155.2 |
|
|
|
Accrued compensation and benefits |
|
67.0 |
|
|
|
109.2 |
|
|
|
Operating lease liability |
|
69.1 |
|
|
|
57.4 |
|
|
|
Finance lease obligation |
|
115.5 |
|
|
|
116.2 |
|
|
|
Deferred revenue |
|
743.0 |
|
|
|
725.0 |
|
|
|
Total current liabilities |
|
1,184.0 |
|
|
|
1,201.5 |
|
|
|
Operating lease liability, non-current |
|
274.9 |
|
|
|
310.7 |
|
|
|
Finance lease obligation, non-current |
|
167.2 |
|
|
|
168.5 |
|
|
|
Convertible senior notes, net, non-current |
|
1,379.7 |
|
|
|
1,377.8 |
|
|
|
Other non-current liabilities |
|
84.0 |
|
|
|
90.8 |
|
|
|
Total liabilities |
|
3,089.8 |
|
|
|
3,149.3 |
|
|
|
Stockholders’ deficit: |
|
|
|
|||||
|
Additional paid-in-capital |
|
2,519.9 |
|
|
|
2,598.0 |
|
|
|
Accumulated deficit |
|
(2,872.6 |
) |
|
|
(2,742.3 |
) |
|
|
Accumulated other comprehensive loss |
|
(18.6 |
) |
|
|
(21.5 |
) |
|
|
Total stockholders’ deficit |
|
(371.3 |
) |
|
|
(165.8 |
) |
|
|
Total liabilities and stockholders’ deficit |
$ |
2,718.5 |
|
|
$ |
2,983.5 |
|
|
|
Dropbox, Inc. |
||||||||||||||||
|
Condensed Consolidated Statements of Cash Flows |
||||||||||||||||
|
(In millions) |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended June 30, |
|
Six Months Ended |
||||||||||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|||||||||
|
Net income |
$ |
110.5 |
|
|
$ |
43.2 |
|
|
$ |
242.8 |
|
|
$ |
112.2 |
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|||||||||
|
Depreciation and amortization |
|
32.4 |
|
|
|
42.7 |
|
|
|
63.8 |
|
|
|
85.2 |
|
|
|
Stock-based compensation |
|
90.5 |
|
|
|
95.3 |
|
|
|
168.5 |
|
|
|
171.3 |
|
|
|
Net loss on real estate assets |
|
— |
|
|
|
2.2 |
|
|
|
— |
|
|
|
2.2 |
|
|
|
Amortization of debt issuance costs |
|
1.0 |
|
|
|
1.1 |
|
|
|
2.1 |
|
|
|
2.1 |
|
|
|
Amortization of deferred commissions |
|
7.4 |
|
|
|
10.1 |
|
|
|
14.9 |
|
|
|
20.8 |
|
|
|
Non-cash operating lease expense |
|
8.8 |
|
|
|
10.8 |
|
|
|
18.1 |
|
|
|
23.5 |
|
|
|
Deferred taxes |
|
1.0 |
|
|
|
4.1 |
|
|
|
0.5 |
|
|
|
7.5 |
|
|
|
Other |
|
(1.1 |
) |
|
|
(0.2 |
) |
|
|
0.1 |
|
|
|
0.5 |
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|||||||||
|
Trade and other receivables, net |
|
(0.5 |
) |
|
|
(2.7 |
) |
|
|
1.1 |
|
|
|
(6.5 |
) |
|
|
Prepaid expenses and other current assets |
|
(11.0 |
) |
|
|
(10.4 |
) |
|
|
(21.7 |
) |
|
|
(17.6 |
) |
|
|
Other assets |
|
1.1 |
|
|
|
2.6 |
|
|
|
2.0 |
|
|
|
3.7 |
|
|
|
Accounts payable |
|
6.4 |
|
|
|
7.2 |
|
|
|
(1.8 |
) |
|
|
6.9 |
|
|
|
Accrued and other current liabilities |
|
(12.5 |
) |
|
|
(33.2 |
) |
|
|
(18.0 |
) |
|
|
(7.6 |
) |
|
|
Accrued compensation and benefits |
|
24.3 |
|
|
|
26.5 |
|
|
|
(42.0 |
) |
|
|
(65.1 |
) |
|
|
Deferred revenue |
|
— |
|
|
|
6.6 |
|
|
|
16.6 |
|
|
|
31.3 |
|
|
|
Other non-current liabilities |
|
1.0 |
|
|
|
(2.9 |
) |
|
|
2.4 |
|
|
|
(7.6 |
) |
|
|
Operating lease liabilities |
|
(13.8 |
) |
|
|
(15.4 |
) |
|
|
(28.4 |
) |
|
|
(35.3 |
) |
|
|
Cash paid for lease termination |
|
(14.9 |
) |
|
|
— |
|
|
|
(14.9 |
) |
|
|
— |
|
|
|
Net cash provided by operating activities |
|
230.6 |
|
|
|
187.6 |
|
|
|
406.1 |
|
|
|
327.5 |
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|||||||||
|
Capital expenditures |
|
(5.9 |
) |
|
|
(3.0 |
) |
|
|
(15.1 |
) |
|
|
(4.9 |
) |
|
|
Business combinations, net of cash acquired |
|
(21.1 |
) |
|
|
— |
|
|
|
(21.1 |
) |
|
|
— |
|
|
|
Purchases of short-term investments |
|
— |
|
|
|
(17.0 |
) |
|
|
(62.3 |
) |
|
|
(47.9 |
) |
|
|
Proceeds from sales of short-term investments |
|
3.0 |
|
|
|
178.9 |
|
|
|
58.6 |
|
|
|
331.6 |
|
|
|
Proceeds from maturities of short-term investments |
|
82.6 |
|
|
|
41.8 |
|
|
|
206.5 |
|
|
|
119.4 |
|
|
|
Other |
|
4.6 |
|
|
|
5.4 |
|
|
|
10.3 |
|
|
|
8.7 |
|
|
|
Net cash provided by investing activities |
|
63.2 |
|
|
|
206.1 |
|
|
|
176.9 |
|
|
|
406.9 |
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|||||||||
|
Payments of debt issuance costs |
|
— |
|
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.1 |
) |
|
|
Payments for taxes related to net share settlement of restricted stock units and awards |
|
(34.7 |
) |
|
|
(32.1 |
) |
|
|
(76.0 |
) |
|
|
(66.2 |
) |
|
|
Proceeds from issuance of common stock, net of taxes withheld |
|
— |
|
|
|
1.0 |
|
|
|
0.1 |
|
|
|
1.2 |
|
|
|
Principal payments on finance lease obligations |
|
(31.8 |
) |
|
|
(31.9 |
) |
|
|
(63.9 |
) |
|
|
(63.9 |
) |
|
|
Common stock repurchases |
|
(260.2 |
) |
|
|
(154.2 |
) |
|
|
(539.6 |
) |
|
|
(329.6 |
) |
|
|
Net cash used in financing activities |
|
(326.7 |
) |
|
|
(217.3 |
) |
|
|
(679.4 |
) |
|
|
(458.6 |
) |
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(0.9 |
) |
|
|
1.2 |
|
|
|
(3.4 |
) |
|
|
1.7 |
|
|
|
Change in cash and cash equivalents |
|
(33.8 |
) |
|
|
177.6 |
|
|
|
(99.8 |
) |
|
|
277.5 |
|
|
|
Cash and cash equivalents – beginning of period |
|
548.9 |
|
|
|
332.7 |
|
|
|
614.9 |
|
|
|
232.8 |
|
|
|
Cash and cash equivalents – end of period |
$ |
515.1 |
|
|
$ |
510.3 |
|
|
$ |
515.1 |
|
|
$ |
510.3 |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Supplemental cash flow data: |
|
|
|
|
|
|
|
|||||||||
|
Property and equipment acquired under finance leases |
$ |
35.3 |
|
|
$ |
33.4 |
|
|
$ |
61.9 |
|
|
$ |
67.9 |
|
|
|
Dropbox, Inc. |
||||||||||||||||||||
|
Three Months Ended June 30, 2024 |
||||||||||||||||||||
|
Reconciliation of GAAP to Non-GAAP results |
||||||||||||||||||||
|
(In millions, except for percentages, which may not foot due to rounding) |
||||||||||||||||||||
|
(Unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
GAAP |
|
Stock-based compensation |
|
Acquisition-related and other expenses |
|
Intangibles amortization |
|
Non-GAAP |
||||||||||
|
Cost of revenue |
$ |
107.0 |
|
|
$ |
(6.0 |
) |
|
$ |
— |
|
|
$ |
(2.8 |
) |
|
$ |
98.2 |
|
|
|
Cost of revenue margin |
|
16.9 |
% |
|
|
(0.9 |
%) |
|
|
— |
% |
|
|
(0.4 |
%) |
|
|
15.5 |
% |
|
|
Gross profit |
|
527.5 |
|
|
|
6.0 |
|
|
|
— |
|
|
|
2.8 |
|
|
|
536.3 |
|
|
|
Gross margin |
|
83.1 |
% |
|
|
0.9 |
% |
|
|
— |
% |
|
|
0.4 |
% |
|
|
84.5 |
% |
|
|
Research and development |
|
227.1 |
|
|
|
(64.2 |
) |
|
|
(3.3 |
) |
|
|
— |
|
|
|
159.6 |
|
|
|
Research and development margin |
|
35.8 |
% |
|
|
(10.1 |
%) |
|
|
(0.5 |
%) |
|
|
— |
% |
|
|
25.2 |
% |
|
|
Sales and marketing |
|
112.5 |
|
|
|
(6.2 |
) |
|
|
— |
|
|
|
(3.0 |
) |
|
|
103.3 |
|
|
|
Sales and marketing margin |
|
17.7 |
% |
|
|
(1.0 |
%) |
|
|
— |
% |
|
|
(0.5 |
%) |
|
|
16.3 |
% |
|
|
General and administrative |
|
60.9 |
|
|
|
(14.1 |
) |
|
|
(1.3 |
) |
|
|
— |
|
|
|
45.5 |
|
|
|
General and administrative margin |
|
9.6 |
% |
|
|
(2.2 |
%) |
|
|
(0.2 |
%) |
|
|
— |
% |
|
|
7.2 |
% |
|
|
Income from operations |
$ |
127.0 |
|
|
$ |
90.5 |
|
|
$ |
4.6 |
|
|
$ |
5.8 |
|
|
$ |
227.9 |
|
|
|
Operating margin |
|
20.0 |
% |
|
|
14.3 |
% |
|
|
0.7 |
% |
|
|
0.9 |
% |
|
|
35.9 |
% |
|
|
Dropbox, Inc. |
||||||||||||||||||||||||||||
|
Three Months Ended June 30, 2023 |
||||||||||||||||||||||||||||
|
Reconciliation of GAAP to Non-GAAP results |
||||||||||||||||||||||||||||
|
(In millions, except for percentages, which may not foot due to rounding) |
||||||||||||||||||||||||||||
|
(Unaudited) |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
GAAP |
|
Stock-based compensation |
|
Acquisition-related and other expenses |
|
Intangibles amortization |
|
Net loss on real estate assets(1) |
|
Workforce reduction expense(2) |
|
Non-GAAP |
||||||||||||||
|
Cost of revenue |
$ |
120.1 |
|
|
$ |
(6.4 |
) |
|
$ |
— |
|
|
$ |
(3.6 |
) |
|
$ |
— |
|
|
$ |
(2.7 |
) |
|
$ |
107.4 |
|
|
|
Cost of revenue margin |
|
19.3 |
% |
|
|
(1.0 |
%) |
|
|
— |
% |
|
|
(0.6 |
%) |
|
|
— |
% |
|
|
(0.4 |
%) |
|
|
17.3 |
% |
|
|
Gross profit |
|
502.4 |
|
|
|
6.4 |
|
|
|
— |
|
|
|
3.6 |
|
|
|
— |
|
|
|
2.7 |
|
|
|
515.1 |
|
|
|
Gross margin |
|
80.7 |
% |
|
|
1.0 |
% |
|
|
— |
% |
|
|
0.6 |
% |
|
|
— |
% |
|
|
0.4 |
% |
|
|
82.7 |
% |
|
|
Research and development |
|
262.8 |
|
|
|
(67.4 |
) |
|
|
(7.9 |
) |
|
|
— |
|
|
|
— |
|
|
|
(27.0 |
) |
|
|
160.5 |
|
|
|
Research and development margin |
|
42.2 |
% |
|
|
(10.8 |
%) |
|
|
(1.3 |
%) |
|
|
— |
% |
|
|
— |
% |
|
|
(4.3 |
%) |
|
|
25.8 |
% |
|
|
Sales and marketing |
|
120.9 |
|
|
|
(6.3 |
) |
|
|
(6.6 |
) |
|
|
(3.4 |
) |
|
|
— |
|
|
|
(6.3 |
) |
|
|
98.3 |
|
|
|
Sales and marketing margin |
|
19.4 |
% |
|
|
(1.0 |
%) |
|
|
(1.1 |
%) |
|
|
(0.5 |
%) |
|
|
— |
% |
|
|
(1.0 |
%) |
|
|
15.8 |
% |
|
|
General and administrative |
|
60.0 |
|
|
|
(15.2 |
) |
|
|
(0.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1.5 |
) |
|
|
43.2 |
|
|
|
General and administrative margin |
|
9.6 |
% |
|
|
(2.4 |
%) |
|
|
— |
% |
|
|
— |
% |
|
|
— |
% |
|
|
(0.2 |
%) |
|
|
6.9 |
% |
|
|
Net loss on real estate assets |
|
2.2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
Net loss on real estate assets margin |
|
0.4 |
% |
|
|
— |
% |
|
|
— |
% |
|
|
— |
% |
|
|
(0.4 |
%) |
|
|
— |
% |
|
|
— |
% |
|
|
Income from operations |
$ |
56.5 |
|
|
$ |
95.3 |
|
|
$ |
14.6 |
|
|
$ |
7.0 |
|
|
$ |
2.2 |
|
|
$ |
37.5 |
|
|
$ |
213.1 |
|
|
|
Operating margin |
|
9.1 |
% |
|
|
15.3 |
% |
|
|
2.3 |
% |
|
|
1.1 |
% |
|
|
0.4 |
% |
|
|
6.0 |
% |
|
|
34.2 |
% |
|
|
(1) |
Includes impairment charges related to real estate assets as a result of our Virtual First work model. |
|
|
(2) |
Includes expenses related to our reduction in workforce such as severance, benefits and other related items. |
|
Dropbox, Inc. |
||||||||||||||||||||
|
Six Months Ended June 30, 2024 |
||||||||||||||||||||
|
Reconciliation of GAAP to Non-GAAP results |
||||||||||||||||||||
|
(In millions, except for percentages, which may not foot due to rounding) |
||||||||||||||||||||
|
(Unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
GAAP |
|
Stock-based compensation |
|
Acquisition-related and other expenses |
|
Intangibles amortization |
|
Non-GAAP |
||||||||||
|
Cost of revenue |
$ |
212.8 |
|
|
$ |
(11.2 |
) |
|
$ |
— |
|
|
$ |
(5.9 |
) |
|
$ |
195.7 |
|
|
|
Cost of revenue margin |
|
16.8 |
% |
|
|
(0.9 |
%) |
|
|
— |
% |
|
|
(0.5 |
%) |
|
|
15.5 |
% |
|
|
Gross profit |
|
1,053.0 |
|
|
|
11.2 |
|
|
|
— |
|
|
|
5.9 |
|
|
|
1,070.1 |
|
|
|
Gross margin |
|
83.2 |
% |
|
|
0.9 |
% |
|
|
— |
% |
|
|
0.5 |
% |
|
|
84.5 |
% |
|
|
Research and development |
|
446.2 |
|
|
|
(119.6 |
) |
|
|
(6.3 |
) |
|
|
— |
|
|
|
320.3 |
|
|
|
Research and development margin |
|
35.3 |
% |
|
|
(9.4 |
%) |
|
|
(0.5 |
%) |
|
|
— |
% |
|
|
25.3 |
% |
|
|
Sales and marketing |
|
221.3 |
|
|
|
(11.3 |
) |
|
|
— |
|
|
|
(6.1 |
) |
|
|
203.9 |
|
|
|
Sales and marketing margin |
|
17.5 |
% |
|
|
(0.9 |
%) |
|
|
— |
% |
|
|
(0.5 |
%) |
|
|
16.1 |
% |
|
|
General and administrative |
|
115.0 |
|
|
|
(26.4 |
) |
|
|
(1.3 |
) |
|
|
— |
|
|
|
87.3 |
|
|
|
General and administrative margin |
|
9.1 |
% |
|
|
(2.1 |
%) |
|
|
(0.1 |
%) |
|
|
— |
% |
|
|
6.9 |
% |
|
|
Income from operations |
$ |
270.5 |
|
|
$ |
168.5 |
|
|
$ |
7.6 |
|
|
$ |
12.0 |
|
|
$ |
458.6 |
|
|
|
Operating margin |
|
21.4 |
% |
|
|
13.3 |
% |
|
|
0.6 |
% |
|
|
0.9 |
% |
|
|
36.2 |
% |
|
|
Dropbox, Inc. |
||||||||||||||||||||||||||||
|
Six Months Ended June 30, 2023 |
||||||||||||||||||||||||||||
|
Reconciliation of GAAP to Non-GAAP results |
||||||||||||||||||||||||||||
|
(In millions, except for percentages, which may not foot due to rounding) |
||||||||||||||||||||||||||||
|
(Unaudited) |
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
GAAP |
|
Stock-based compensation |
|
Acquisition-related and other expenses |
|
Intangibles amortization |
|
Net loss on real estate assets(1) |
|
Workforce reduction expense(2) |
|
Non-GAAP |
||||||||||||||
|
Cost of revenue |
$ |
236.9 |
|
|
$ |
(11.8 |
) |
|
$ |
— |
|
|
$ |
(7.2 |
) |
|
$ |
— |
|
|
$ |
(2.7 |
) |
|
$ |
215.2 |
|
|
|
Cost of revenue margin |
|
19.2 |
% |
|
|
(1.0 |
%) |
|
|
— |
% |
|
|
(0.6 |
%) |
|
|
— |
% |
|
|
(0.2 |
%) |
|
|
17.4 |
% |
|
|
Gross profit |
|
996.7 |
|
|
|
11.8 |
|
|
|
— |
|
|
|
7.2 |
|
|
|
— |
|
|
|
2.7 |
|
|
|
1,018.4 |
|
|
|
Gross margin |
|
80.8 |
% |
|
|
1.0 |
% |
|
|
— |
% |
|
|
0.6 |
% |
|
|
— |
% |
|
|
0.2 |
% |
|
|
82.6 |
% |
|
|
Research and development |
|
498.0 |
|
|
|
(120.3 |
) |
|
|
(13.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
(27.0 |
) |
|
|
337.4 |
|
|
|
Research and development margin |
|
40.4 |
% |
|
|
(9.8 |
%) |
|
|
(1.1 |
%) |
|
|
— |
% |
|
|
— |
% |
|
|
(2.2 |
%) |
|
|
27.4 |
% |
|
|
Sales and marketing |
|
240.1 |
|
|
|
(11.8 |
) |
|
|
(8.3 |
) |
|
|
(6.8 |
) |
|
|
— |
|
|
|
(6.3 |
) |
|
|
206.9 |
|
|
|
Sales and marketing margin |
|
19.5 |
% |
|
|
(1.0 |
%) |
|
|
(0.7 |
%) |
|
|
(0.6 |
%) |
|
|
— |
% |
|
|
(0.5 |
%) |
|
|
16.8 |
% |
|
|
General and administrative |
|
115.8 |
|
|
|
(27.4 |
) |
|
|
(0.4 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1.5 |
) |
|
|
86.5 |
|
|
|
General and administrative margin |
|
9.4 |
% |
|
|
(2.2 |
%) |
|
|
— |
% |
|
|
— |
% |
|
|
— |
% |
|
|
(0.1 |
%) |
|
|
7.0 |
% |
|
|
Net loss on real estate assets |
|
2.2 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
Net loss on real estate assets margin |
|
0.2 |
% |
|
|
— |
% |
|
|
— |
% |
|
|
— |
% |
|
|
(0.2 |
%) |
|
|
— |
% |
|
|
— |
% |
|
|
Income from operations |
$ |
140.6 |
|
|
$ |
171.3 |
|
|
$ |
22.0 |
|
|
$ |
14.0 |
|
|
$ |
2.2 |
|
|
$ |
37.5 |
|
|
$ |
387.6 |
|
|
|
Operating margin |
|
11.4 |
% |
|
|
13.9 |
% |
|
|
1.8 |
% |
|
|
1.1 |
% |
|
|
0.2 |
% |
|
|
3.0 |
% |
|
|
31.4 |
% |
|
|
(1) |
Includes impairment charges related to real estate assets as a result of our Virtual First work model. |
|
|
(2) |
Includes expenses related to our reduction in workforce such as severance, benefits and other related items. |
|
Dropbox, Inc. |
||||||||||||||||
|
Three and Six Months Ended June 30, 2024 and 2023 |
||||||||||||||||
|
Reconciliation of GAAP net income to Non-GAAP net income and Non-GAAP diluted net income per share |
||||||||||||||||
|
(In millions, except per share data) |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
GAAP net income |
$ |
110.5 |
|
|
$ |
43.2 |
|
|
$ |
242.8 |
|
|
$ |
112.2 |
|
|
|
Stock-based compensation |
|
90.5 |
|
|
|
95.3 |
|
|
|
168.5 |
|
|
|
171.3 |
|
|
|
Acquisition-related and other expenses |
|
4.6 |
|
|
|
14.6 |
|
|
|
7.6 |
|
|
|
22.0 |
|
|
|
Amortization of acquired intangible assets |
|
5.8 |
|
|
|
7.0 |
|
|
|
12.0 |
|
|
|
14.0 |
|
|
|
Net loss on real estate assets |
|
— |
|
|
|
2.2 |
|
|
|
— |
|
|
|
2.2 |
|
|
|
Workforce reduction expense |
|
— |
|
|
|
37.5 |
|
|
|
— |
|
|
|
37.5 |
|
|
|
Income tax effects of non-GAAP adjustments |
|
(17.3 |
) |
|
|
(25.8 |
) |
|
|
(40.1 |
) |
|
|
(39.1 |
) |
|
|
Non-GAAP net income |
$ |
194.1 |
|
|
$ |
174.0 |
|
|
$ |
390.8 |
|
|
$ |
320.1 |
|
|
|
Non-GAAP diluted net income per share |
$ |
0.60 |
|
|
$ |
0.51 |
|
|
$ |
1.18 |
|
|
$ |
0.92 |
|
|
|
Weighted-average shares used to compute Non-GAAP diluted net income per share |
|
323.7 |
|
|
|
343.8 |
|
|
|
332.4 |
|
|
|
346.8 |
|
|
|
Dropbox, Inc. |
||||||||||||||||
|
Three and Six Months Ended June 30, 2024 and 2023 |
||||||||||||||||
|
Reconciliation of free cash flow and supplemental cash flow disclosure |
||||||||||||||||
|
(In millions, except for percentages) |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
|
|
|
|
|
|
||||||||||||
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
Free cash flow reconciliation: |
|
|
|
|
|
|
|
|||||||||
|
Net cash provided by operating activities |
$ |
230.6 |
|
|
$ |
187.6 |
|
|
$ |
406.1 |
|
|
$ |
327.5 |
|
|
|
Less: |
|
|
|
|
|
|
|
|||||||||
|
Capital expenditures |
|
(5.9 |
) |
|
|
(3.0 |
) |
|
|
(15.1 |
) |
|
|
(4.9 |
) |
|
|
Free cash flow |
$ |
224.7 |
|
|
$ |
184.6 |
|
|
$ |
391.0 |
|
|
$ |
322.6 |
|
|
|
Free cash flow margin |
|
35.4 |
% |
|
|
29.7 |
% |
|
|
30.9 |
% |
|
|
26.2 |
% |
|
|
Supplemental disclosures: |
|
|
|
|
|
|
|
|||||||||
|
Key employee holdback payments related to acquisitions(1) |
$ |
0.5 |
|
|
$ |
10.6 |
|
|
$ |
1.0 |
|
|
$ |
21.4 |
|
|
|
Payments related to workforce reduction(2) |
$ |
— |
|
|
$ |
34.0 |
|
|
$ |
— |
|
|
$ |
34.0 |
|
|
|
Cash paid for lease termination(3) |
$ |
14.9 |
|
|
$ |
— |
|
|
$ |
14.9 |
|
|
$ |
— |
|
|
Contacts
Investors:
Peter Stabler
ir@dropbox.com
or
Media:
Maddy Pelton
press@dropbox.com
Read full story here
